world stock market dark shadow
Concerns about U.S. tightening and interest rate hike
Bad news, such as the ‘immediate’ Ukraine crisis
The three major U.S. indices plunged… tech stock crash
Global supply chain instability and inflation pressure
Reporter Janghwan Oh” style=”padding:0px;margin:0px”>
▲ On the billboard of Hana Bank’s dealing room in Jung-gu, Seoul on the 24th, the closing price of the KOSPI was shown at 2792.00, down 42.29 points (1.49%) from the previous trading day. It is the first time in 13 months since December 23, 2020 (2759.82) that the KOSPI index has broken below the 2,800 line based on the closing price.
By Oh Jang-hwan
On the 24th, the KOSPI collapsed without a hitch in the domestic stock market due to the ‘cold wave from the US’. Amidst concerns about early tightening by the US Federal Reserve (Fed) and an increase in the key interest rate, bad news, large and small, continue to occur, including adjustments to technology stocks. The geopolitical risk surrounding Ukraine has also been triggered. For the time being, it is predicted that a dark shadow will be cast on the global stock market, including Korea.
On this day, the KOSPI closed at 2792.00, down 42.29 points (1.49%) from the previous day. It is the first time in about 13 months since December 23, 2020, that the KOSPI closed below the 2800 line. The KOSPI fell to 2780.68 at one point during the day. In the KOSPI market, foreigners net sold 435.1 billion won and individuals 136.5 billion won, supporting the decline in the index. However, institutions net bought 595.2 billion won to prevent further decline. The KOSPI 200 Volatility Index (VKOSPI), also called the ‘fear index’, closed at 21.48, up 10.95% from the previous trading day. It is the highest level in two months since November 30 (23.23). The KOSDAQ index also fell 27.45 points (2.91%) and closed at 915.40, the lowest level since March 11 (908.01) of last year.
Analysts say that concerns over the possibility of a full-fledged monetary tightening movement centered on the US, which has been sucking global funds, have had a negative impact on investor sentiment as inflationary pressure from global supply chain instability spreads throughout the market. In the New York Stock Exchange, three major indexes, including the Dow Jones Industrial Average, plunged 1.30-2.72% on the 21st on concerns about the Fed’s premature tightening. On the same day, these indices continued to plunge around 2% after opening. Noh Roh-gil, a researcher at Shinhan Investment Co., Ltd., said, “As the US stock market is difficult, foreign investors have started selling in the domestic market.”
Wall Street experts raised the number of rate hikes ahead of the January Federal Open Market Committee (FOMC) meeting to be held on the 25th-26th (local time), which also dampened investor sentiment. According to CNBC and others, Goldman Sachs economist David Meruckle predicted that the Fed could raise rates more than five times due to steep inflation. However, stock market experts predicted that the KOSPI would not stay below 2800 for long after the uncertainty of the US monetary policy was resolved to some extent. Park Gwang-nam, a researcher at Mirae Asset Securities, said, “The hawkish austerity policy of the US will continue, but it is unlikely that it will proceed as unreasonably as the market fears.” At the same time, there is an observation that it can give a positive signal to the market as Tesla, Intel, and Apple are expected to announce good results one after another, starting with Microsoft on the 25th.
Reporter Song Soo-yeon
